Two Pronged Strategy
Anand Ramanathan
Manager, KPMG Advisory Services
This summer season will actually make a difference for the consumer durable industry and the players have already conveyed this to the consumers. Interestingly the platform for this year is health, as this is one area where we will see a top line action. The bottom line action has already taken place with the IPL and will further escalate to festivals like Baisakhi in north and New Year in the south (Tamil Nadu and Kerala). Thus going forward, this quarter (April - June) will witness a 30-35% growth in the consumer durable players. Last year, the majority growth was in the last two quarters of the year and that too because the economy was in a revival mode. However this year, pricing will be a crucial factor as it will be directly linked to the volumes. Given the kind of boom which is ongoing currently, I expect that the prices of the players in the market shall be quite competitive. Now when it comes to volumes, Indian players will have a disadvantage over the Korean and Chinese players and there will be more pressure on their volumes during the end of the season. This gap can only be bridged by adopting a two pronged strategy. First the Indian companies have to develop a strong line up of products, as a majority of the innovation that exists in the market is led by the Korean players. But on the other hand, the Indian companies have strength in terms of local presence and efficacy, which they need to develop. However, with favourable consumer demographics and long-term growth projections in services and industry, the consumer durables industry in India is set for sustained growth over the long term.
Neha Saraiya
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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